Best of Market Sentiment 2025
Gold, Energy Portfolio, Buying the Dip and more...
Before we close the books on 2025, we want to pause and extend our deepest gratitude to you. Market Sentiment has always been about actionable research, but it is your engagement, support, and curiosity that turn these reports into a living community.
This year, as we navigated the complexities of the shifting macro winds, your support remained our most valuable asset.
This year was big. We crossed 60K readers, launched Rebound Capital, and published 90 articles, ranging from deep dives to thematic equity baskets. Below, we’ve curated the highlights - the pieces that resonated the most with you, and made you some money along the way ;)
Green paper is not evergreen. Gold is.
We wrote about how gold remains an important asset class a few months ago. The underlying logic was simple: no one in power seems interested in managing the ever-increasing U.S. debt.
Since our report was published, Gold has outperformed the S&P 500 by 3.8x! Everyone from retail investors to central banks is buying gold at an unprecedented rate.
Energy and optics portfolio
Not long ago, the choke point in building AI compute capacity was GPU production. However, that bottleneck has recently receded, making way for another bottleneck - energy.
OpenAI wants to build 250 GW of compute capacity by 2033. This is more than India’s entire peak power demand in 2025.
Computing capacity lies at the bedrock of the AI economy. AI may look like software, but under the hood, it behaves not much unlike heavy industry. Every model, from GPT to Gemini, runs on compute clusters that consume power at the scale of small cities.
While energy is a second-order impact of AI, we found a third-order impact while building our energy portfolio.
As far as we can tell, we are the first to cover this trade in depth. This portfolio is taking a bet on one of the most profound hardware transformations occurring in computing right now.
While traditional mega caps, such as Nvidia, Broadcom, Intel, etc., have some exposure here, the best way to capture upside will be to build a basket of optics companies that will drive this change over the next 5 years.
A simple backtest validates our thesis: YTD, the Optics portfolio would have returned 3x that of the QQQ, with only 2 of the 9 picks dropping in value.
Buy the dip
“Buy when there’s blood in the streets, even if the blood is your own.”
While it may feel like a few years ago, just 8 months back, the stock market was in extreme fear, per the CNN Fear and Greed Index.
The S&P 500 index was down 10% from its ATH, Trump had started another trade war, and it was the worst start to a presidency in 50 years.
If you have a long investment horizon, the best thing to do is buy the dip.
The market is now up 23% since we published the report.
Betting on betting
After the stellar response to our GLP-1 basket, we were left in a unique position to identify similar industries that are largely flying under the radar, but are growing rapidly.
This brought us to the betting industry.
If you are like us, you must have at least wondered once why everyone’s betting on everything. Gambling ads are everywhere, and with the legalization of event contracts and the overall lax enforcement, the market is only expected to grow.
And fascinatingly, people almost always underestimate the amount of money these companies generate.
The magic of drawdowns
Netflix, at the end of 2021, was a pandemic darling and doubled from March 2020 to October 2021.
Then the market turned.
Over the next 7 months, the stock lost 73% of its value. What’s incredible is that before the downturn, Netflix was worth $300B, employees were dying to work for the company (FAANG), and it was one of the strongest brands of the S&P 500.
The company is now up 540% from its 2022 lows.
This is not only the story of Netflix. Every major company goes through a period of crisis where investors write it off, only for it to eventually make a big comeback.
Now imagine a portfolio full of companies in a drawdown, on their way to a rebound.
Simple Portfolio Series
In this 5-part series, we focused on finding and evaluating the performance of some of the best portfolios on the planet:
Simple Portfolio #1 - The 3 Fund Portfolio: This simple portfolio outperformed 83% of active fund managers and 90% of endowment funds over the last two decades while having an expense ratio of less than 0.1%.
Simple Portfolio #2 - All Weather Portfolio: During the Covid-19 crash, when the S&P 500 was down 20%, the All Weather portfolio was down only 1%. This is the definitive guide to building an All-Weather portfolio.
Simple Portfolio #3 - The 60/40 Portfolio: “You don't have to be brilliant, only a little bit wiser than the other guys, on average, for a long, long time.” – Charlie Munger.
Ben Trotsky became one of the most successful fund managers in the 80s simply because he devised a brilliant strategy for investing in junk bonds that he called “Strategic Mediocrity.” The closest idea to strategic mediocrity in the stock market would be the 60/40 portfolio.
Simple Portfolio #4 - Cockroach Portfolio: Most portfolios are designed to work well only in periods of growth. But what if we experience another stagflation like in the 70s, when stocks were down ~50%, and the bonds 30%? It’s situations like these where the Cockroach Portfolio shines through.
Simple Portfolio #5 - Coffee Can Portfolio: The problem in modern investing is that there is too much information readily available, and most investors tend to give undue weight to news, and most of the time, it pays to ignore the sensationalized headlines. One way to defend against this folly is to use the coffee can portfolio.
As you can see (and our paid subscribers will vouch for this), implementing any of these strategies on even a $10K portfolio should easily cover the cost of your subscription — many times over.
If you made it till the end and are still on the fence, here is a limited-time 20% discount on the paid subscription. This offer is only valid for 24 hours, and the price is locked in as long as you remain a subscriber.